Yuri Milner’s DST Global – Where They’ve Been, Where They Might Go

Yuri Milner’s DST Global has launched a new fund – DST Global IV. The Russia-based investment firm originally gained notoriety for its $200M Series D investment in Facebook which valued the company at $10B. At the time, many assorted haters and bubble prognosticators claimed it was a foolish bet. Ultimately, it proved quite prescient.  Given DST’s new fund, we wanted to take a deeper dive into their investment history to see what we might expect from DST moving forward.

DST has slowed down its pace to between 3-4 deals per year, after a flurry of investments in 2011 which included future Unicorns Zynga ($329M Series D), JingDong ($1.5B funding), Spotify ($100M Series D), AirBnB ($112M Series B), ZocDoc ($75M Series C), and Twitter ($400M Series G).

Post-2011 the firm has invested in other notable companies including German online retailer Zalando (backed by Rocket Internet), Lending Club, Box, and most recently the $210M Series F and subsequent rumored billion dollar raise for Indian eCommerce company Flipkart.

DST investments span the globe

California held the highest concentration of investments for DST since 2010 driven by investments in AirBnB, Twitter, Box, Facebook, among others. International investments accounted for 38% of all deals with investments in China’s Jingdong, and Sweden’s Spotify, among others. As they invest through their new fund, it may make sense to keep a close eye on DST’s continuing desire to invest in Asia, and more specifically, China, as Partner Josh Lindfor has been quoted in a NY Times article saying:

China really stands out in the Internet world…It has one-quarter of the world’s internet users, and it has its own separate ecosystem.

DST Keys in on Late-Stage

In the past 5 years, DST has largely focused on late-stage deals, with nearly 53% of all deals being Series D or later. DST often invests in large rounds with large attached valuations. The firm’s aforementioned bet on Facebook had the company at $2B and they also invested in beleaguered Box and Lending Club at valuations over $2 billion.  6 of its last 10 deals have been in companies with valuations greater than $1 billion.  Not unlike private equity and hedge fund investors, DST is investing late in proven winners. The below breakdown is of DST investments over the past 5 years by stage.

Internet Software & Services and eCommerce lead investments

After social investments in Facebook and Twitter in 2011, DST seems to have shifted its focus towards eCommerce and maintained its presence in Internet Software & Services. The two sectors accounted for a combined 78% of all deals since 2012. With the rise of international eCommerce funding, expect this trend to continue.

Exit Activity

Since 2011 DST has had five exits, all IPOs, with 3 coming in the last year. These IPOs included, from most recent to oldest, Jingdong ($28.6B valuation), Twitter ($14.2B), Facebook ($104B), Zynga ($7.7B), and Groupon ($17.8B). With rumored future IPOs for Box, Flipkart and Lending Club, DST could have almost half of its investments since 2011 exit via IPO. Of course, given the stage DST is investing at, this is not surprising and is likely their expectation for companies they invest in.

The exit valuation chart below highlights the range of valuations and timeframe of the aforementioned exits:

The data and screen shot data visualizations in this brief are directly copy/pasted from CB Insights venture capital database and its Investor Analytics tool. No excel necessary. All visualizations are interactive online allowing you to see the underlying company financing or exit information just by clicking as well. Create an account below if you’d like to try it out.